Debt
Debt doesn't have to be a scary four letter word if it's managed properly and you use your debt as leverage to grow your wealth. Learn why not all debt is bad by watching this video. If you have found yourself in debt, then use our free template to start tackling your high-interest debt!
Types of Debt
There are various forms of debt. Below, we outline six types of debt, highlighting the advantages and disadvantages of each (because everyone appreciates a good pro/con list!).
Credit Card
Pro: You can take advantage of credit card rewards and benefits.
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Con: There's a risk of overspending, leading to high charges.
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Mortgage
Pro: Allows you to buy a home for personal use or an investment.
Con: You might end up with a mortgage that exceeds your budget, increasing the risk of missing payments.
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Student Loans
Pro: A valuable resource to assist with educational expenses.
Con: It may require a lengthy repayment period, and future earnings might not justify the investment.
Medical
Pro: Helps prevent your medical bills from going into collections.
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Con: Getting a loan to pay off the bills before negotiating them could result in higher costs.
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Auto
Pro: Enables you to acquire a vehicle when you require this mode of transportation.
Con: Involves paying interest on a loan for an asset loses value over time.
Personal Loan
Pro: You may have the opportunity to combine high-interest debt into a single loan with a lower interest rate.
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Con: There may be significant fees involved in establishing the loan or fees for early repayment.
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